Bancor is this new technology that is really hyped up in the crypto community. But it's kinda difficult to understand. This is my attempt at explaining in a really simple way...

What is Bancor?

 
It's a software that lets you create your own cryptocurrency on the Ethereum blockchain without the need for technical skills... you just use the software, set your currency's rules and you're done.

So who would use this?

 
The first really big use case is crowdfunding. Think about a Kickstarter project... you invest $100 in a project you believe in. But what do you actually get for that $100?

Most likely you get early access to a product or service, at a lower price. So in fact you're just buying something at a discount. That's it!

Let's go a step further... and talk about the biggest crowdsale there is: the New York Stock Exchange Initial Public Offering (NYSE IPO). That is where big companies emit stock for the public to buy, and trade on the stock market.

So if you invest $100 in the Tesla IPO what do you get? You get a % part of the Tesla company, and you get a liquid stock that you can sell of at any time and get back your us dollars. You also have the opportunity to make money from the appreciation of that stock.

So you get a pretty good deal, but what does Tesla get? They get your $100 and others'. That's free money they can use right away. They effectively create credit.

So the stock is in fact a newly created currency. But it's not a very good one...

• You can't spend it freely.
• You can't sell it if there is no one buying it. This is called a liquidity problem.

Bancor solved these 2 problems for any currency created, no matter how small (read more about the tech in their whitepaper).

The new paradigm

 
So with Bancor you can create a new currency and host a crowdsale for it. The buyers can of course make money from the appreciation of that currency.

But the really cool part is that they can also spend it in other places, or they can liquidate it at any time, without needing to find a buyer for it. That is ridiculously genius!

So let's say your neighbourhood coffeeshop creates a coffee token (the covfefe coin). You buy that token and later exchange it for coffee in that coffeeshop. Nothing new right?

But now, with Bancor, that token has a life of its own... it can appreciate over time, if people buy it. Then the people who bought it early can get 10 cups of coffee for the price of one.

But it doesn't stop there. You can liquidate the token at any time, getting what it's worth at that time. And further more you can spend it elsewhere... for example in your local grocery store or even in another country.

That means a lot of liquidity.... with any token emitted, no matter how small it is. And with that amount of liquidity comes great value.

It's like going on o trip to Asia and paying for your taxi with a little bit of that Tesla stock you bought. If that were possible, the stock would value more because of its sheer usability.

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